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4 schemes sure to cheat you in property

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Your Investment Property | 05 Mar 2013, 10:00 AM Agree 0
Property investing has its dark side and, though largely legal, there are some clever schemes a handful of unscrupulous property ‘gurus’ continue to run in a desperate attempt to rip you off
  • Kazz | 05 Mar 2013, 10:23 PM Agree 0
    You failed to mention Real Estate agents who lie to you (particuarly in regards to the configuration of a property) only to find upon building inspection report that a 4 bdr 1 bath property is in fact a 3 bdr 1 bath property due to a low cieling, or some other similar building code violation problem. When asked, the agent says "yes I knew about that. I have sold this property two times before. Its not a problem is it?" Of course it is. Agents who fraudulently mislead a purchaser is a HUGE problem, one which I would rate above all the problems you mentioned.
  • Dr. B | 25 Jun 2013, 11:44 PM Agree 0
    Other common problems which I had encountered wrt real estate agents' treachery:

    1. Misleading dimensions of property's layout (always measure the rooms yourself!!)
    2. in my own case, telling me the brand new house I'm purchasing is the 'last one standing' when actually it was one of the 1st to be sold (I paid 35K more compared to my neighbors who purchased 6 months later)
    3. re-advertising a stagnant property online as 'new' when it has been on the market on last 12 months
    4. pulled highly inflated (sometimes up to 30-40%) rental figures out of thin air and claimed that's the potential rental income possible for the property. (always go to the online rental listing and looked at similar areas' rental)
    5. again in my case with a CBD apartment that I had really liked, repeatedly upping the asking price (after I signed the paper thingy saying that I'll commit to the asking price) saying that another 'competitive and aggressive' buyer has come into the picture and 'just another 5k' will clinch the deal.

    I could go on forever....but at the end of the day, if you are time poor like me, then get a buyer's advocate (all my friends who did it have no regrets) or be prepared to challenge the real estate agents' claims and BS.
  • Ultimate | 27 Jun 2013, 09:32 PM Agree 0
    sure Dr.B - it's easy to blame real estate agents - who by the way are paid by VENDORS to get the best result for the VENDOR - so when you trust them to tell you the honest truth you are being naive - most property brochures include terms like 'verbal representations are not to be relied on' - and also in law, sales and marketing people are expected to use (legal term) 'puff' to make their product sound as attractive as possible - heard the term 'caveat emptor' (let the buyer beware) ? That's the subject of everyday 630 Current Affair TV sob-stories - 'he seemed like such a nice man in a suit - I trusted him - how could this happen ... ?'

    It happens because a fool and his money are easily parted - don't be a fool and do your own (another legal term) due diligence - if you trust the first person in a suit who tries to sell you something I'm sorry - you have a life of problems ahead ...
  • WillSmith | 20 Oct 2016, 03:08 PM Agree 0
    I'll add one cheat from property agents that I have seen recently, and which I believe is going to become more common as various property markets across the country are either going down, or have reached their peak. So a property is being advertised for sale. To justify the relatively high price, the ad mentions that the place is currently being rented for $xxx/week (replace xxx with an attractive rent amount). The gullible investor will take the 2 figures (asking price and current rent), do his quick calculation and say : "wow, that looks like a great investment opportunity!". Except that if you look at it more closely, you will see that the place has been rented for like 2 or 3 months only, just before putting the place for sale, and at a price way higher than the market price. It may be rented by the property agent's mate. It's likely the place won't be rented for much longer. I mean certainly not at that price.

    Conclusion is : do your own research and check what similar properties in the neighborhood rent for.
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